High-level opening-up ushers quality development in a new year

The stagnation of the World Trade Organization's reforms, the United Kingdom's Brexit and the United States' withdrawal from multiple international organizations and agreements (although the US later rejoined them) show that certain countries are no longer interested, or are losing interest, in multilateral cooperation.

In fact, some Western countries are trying to establish international mechanisms that exclude China in areas such as trade, investment and finance in a clear demonstration of economic protectionism.

The rising "de-globalization" sentiments in some countries are indicative of an imbalanced global power structure, insufficient global public goods provision and inefficacious governance mechanisms. This means global economic and trade rules have failed to keep pace with the developing times. With the global division of labor shifting toward value chain segmentation, traditional international economic and trade rules, which focus on border-opening measures, are no longer sufficient to meet the demands of the new situation.

This inferior high-quality institutional environment limits the cross-border flow of innovation-driven elements. Factors such as trade and investment facilitation, intellectual property rights protection, fair competition principle and business environment have increasingly become critical variables affecting global trade and capital flows.

The era when a single country dominated international economic and trade rules has passed. The development of the international economic system requires the participation of new forces, with expanding institutional opening-up being important for addressing the changing dynamics of globalization.

Institutional opening-up can significantly reduce the institutional transaction costs of global trade and investment, and promote liberalization, as well as trade and investment by adopting a negative list approach to manage market access of goods and factors, and combining pre-establishment national treatment with a negative list for investment. This will simplify the economic process, reduce transaction costs and improve operational efficiency.

Institutional opening-up also builds a transparent, stable and predictable institutional environment, boosting the confidence of global investors. It focuses on rules, regulations, management and standards to stabilize market expectations and stimulate the vitality of various market entities, fostering endogenous growth.

In summary, the essence of advancing institutional opening-up lies in fully leveraging China's advantages, helping reform the global economic governance system and leading its development. China's contributions to the improvement of global economic and trade rules will provide more Chinese wisdom and solutions to the global economic governance system.

China has signed more than 200 cooperation documents with more than 150 countries and over 30 international organizations, covering all aspects of the "five connectivity" (policy coordination, infrastructure connectivity, unimpeded trade, financial integration and closer people-to-people ties). The Belt and Road Initiative, for example, is dedicated to establishing international cooperation mechanisms that align with the development plans and needs of various countries. The initiative strengthens multilateral cooperation, lifting institutional opening-up to new levels, thereby shaping a fairer and more reasonable and efficient global economic governance system.

In terms of "hard connectivity", the China-Europe Railway Express now links 123 cities in China with 227 cities across 25 European countries, with domestic rail routes covering up to 1,600 kilometers and international routes up to 1,000 km. The freight transportation time between China and Europe has been reduced by more than five days and customs clearance has become more efficient and convenient since the railway began operating, with the total transit time reduced by more than 30 percent.

In terms of "soft connectivity", the goals of the Belt and Road Initiative are aligned with those of global and regional organizations such as the UN's 2030 Agenda for Sustainable Development, the European Union's Connecting Europe and Asia strategy, the African Union's Agenda 2063 and ASEAN's Master Plan on ASEAN Connectivity 2025, strengthening strategic and policy coordination between China and the world.

The initiative has prompted participating countries to create dozens of small multilateral cooperation mechanisms through cross-border integration of rules, regulations, management and standards. These include mechanisms for cooperation among ports along the 21st Century Maritime Silk Road, energy cooperation under the Belt and Road framework, a regular banking cooperation mechanism, a Green Development Coalition and an accounting standards cooperation system.

The Belt and Road Initiative follows global economic, technological, industrial and social development trends and adopts a steady approach to cooperation in new fields such as the green economy, the digital economy and innovation-driven sectors, cultivating new growth areas. Over the past decade, the Digital Silk Road and the Green Silk Road have transformed from concept to reality. These initiatives have promoted the opening-up of markets in emerging fields such as the digital economy and the green economy.

Specifically, the initiative promotes shared decision-making rights in rule-making among participating countries, strengthening cross-border integration of digital and green trade rules, and developing multilevel digital trade and green investment suited to various levels of development. This serves as a model of institutional opening-up facilitating the development of global trade and investment.

Through its strategic projects and institutional innovations, the initiative has been facilitating greater cooperation and deeper integration across diverse sectors and regions. The initiative, in essence, represents China's commitment to expand institutional opening-up and contribute to global governance reform in order to make the global economic system fairer, and more efficient and sustainable.

Peng Yuchao is the vice-dean of and a professor at the School of Finance, Central University of Finance and Economics; and Li Juncheng is an associate researcher at the Institute of Finance and Banking, Chinese Academy of Social Sciences.

The views don't necessarily reflect those of China Daily.

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